Citizens rally behind shift to Cash-Based Budgeting System

Civil Society Organizations stakeholders raise their hands when asked if they support the governement's shift to a cash-based budgeting system at Ayuntamiento in Intramuros, Manila on August 31, 2018.

Manila, Philippines - Representatives from Civil Society Organizations (CSOs) expressed their support for the shift to cash-based budgeting system during the “CSOs Meet with Ben: An Open Dialogue on the Annual Cash-Based Appropriation” held this afternoon at the Ayuntamiento in Intramuros.

The forum, organized by Department of Budget and Management in collaboration with CSO consortium of the Philippine Open Government Partnership (PH-OGP), featured a keynote address from DBM Secretary Benjamin Diokno and an open forum with the Secretary.

In his keynote address, the Secretary explained the difference between the previous budgeting system—a two-year obligation-based budget—and the new annual cash-based budgeting regime.

“In an obligation-based budget system, contracts awarded before the end of the fiscal year can be delivered even after that year,” the budget chief explained. “In a cash-based budget, only projects and services that can be delivered within the end of the year will be included in the budget.”

The cash-based system will be implemented next year, Fiscal Year 2019. It is expected to result to greater fiscal discipline, prudent use of limited resources, and improved delivery of public goods and services.

“At the end of the day, what matters are real and concrete results, not contracts,” Secretary Diokno said.

According to the Secretary, cash-based budgeting is the most widely-used budgeting system, with 73% of the Organisation for Economic Co-operation and Development countries around the world, as well as the private sector, implementing it.

“This reform modernizes the budgeting system. It will make us at par with our neighboring countries,” he added.

In the open forum, most of the CSO representatives present expressed their support for the shift to the cash-based budgeting system.

“We are hopeful that this kind of budgeting process will be more helpful,” one participant said.

Netizens support cash-based budget

In a recent poll posted by the House of Representatives Official Facebook Page, 70% of more than 1,000 people who voted said they were in favor of a cash-based budgeting system. A number of netizens also expressed the reasons behind their support in the comments section of the post.

One netizen said that “projects should be done within the time and budget they were approved of” and a cash-based budget would allow government to “focus itself in improving its project management skills and legislate to remove the excess bureaucracy and corruption; as well as making parties answerable for not delivering on-time and of quality”.

“Not doing so means that we accept the fact that if projects are delayed, it's okay,” he added.

Another netizen gave a “big no” to obligation-based budgeting, saying that “if there are projects delayed, the contractors may ask additional funds to cover up their losses.”

House Majority Leader Rolando Andaya has already confirmed that the lower house is renewing their support for the annual cash-based budgeting system being pushed by DBM.

Congressman Andaya has also congratulated Secretary Diokno for the cash-based reform, which the legislator says is the budget chief’s “legacy”.